The number of community share issues, which allow members of the public to invest in local shops, pubs or other services, more than doubled in 2009, according to the Community Shares Programme, a partnership between the Development Trusts Association and Cooperatives UK.
The Treasury is considering reviewing its regulation of the sector, but Helen Barber, head of legal services at Cooperatives UK, which has drawn up voluntary codes of good practice for community shares, said she hoped the Treasury would allow the sector to continue regulating itself.
"The sector has strict voluntary codes of practice that govern community shares, which have worked well so far," she said.
Jim Brown, the consultant heading the Community Shares Programme, said that good regulation of the sector would become more important as financial institutions became more involved in share issues.
"We're interested in whether a lender would be interested in stepping in and underwriting these share issues," he said. "With the involvement of financial institutions, the question of regulation becomes more important."
The Treasury declined to comment on the proposal.